Impending redundancy exercise triggered by rationalisation of branch network, digital transformation
Scotiabank Jamaica has today conceded that there will be staff cuts in the coming weeks, as a result of its ongoing rationalisation of its branch network as well as its digital transformation programme.
The admission was made by David Noel, president and CEO of Scotiabank, during the bank’s quarterly news briefing on its positive fourth quarter performance.
Noel was questioned by business journalists about what many believe to be impending staff cuts occasioned by its branch rationalisation initiative, where the bank previously announced that it would be closing two branches and converting six others to a digital operation, as well as its digital transformation initiative.
This digital transformation initiative will see many of the in-branch services being transitioned onto the digital space. The Black River branch is to be closed in February 2021 while the Old Harbour location will be shut two months later in April 2021.
In the meantime, six other Scotiabank branches – Christiana, Falmouth, Portmore, Port Antonio, Port Maria and St Ann’s Bay – will be converted to the bank’s digital operating model by January 2021.
ADMISSION OF STAFF CUTS
In admitting to the staff cuts, Noel, who is slated to return to Canada to lead the bank’s Atlantic Region next month, was guarded in his response. He indicated that the rationalisation of the branch network and the digital transformation was not about cutting staff but more about improving on the customer experience. He eventually conceded that there would be staff cuts coming.
He was pressed about giving more information about the impending staff cuts but indicated that he would be unable to give any detailed information. He justified his pronouncement, stating that the bank is currently in discussion with the union representing workers, the Bustamante Industrial Trade Union, about the number of staff positions to be axed. He was quick to point out that the discussions with the union also extend to seeing, where possible, that some workers be transitioned to other areas of the business.
Noel, who will be succeeded as president and CEO of the bank’s Jamaican group operations by Audrey Tugwell Henry starting January 1, 2021, was also asked about the savings to come from the retrenchment exercise.
He conceded that there would be some savings but that could only be determined at the end of negotiations with the union. He made the point that while there would be savings from the exercise, the bank has been investing in other areas of its operations to bring about an efficient branch structure.
REASONS FOR RATIONALISING BRANCH NETWORK
Scotiabank reported that the changes to its branch network were made to better align its organisational structure with current revenues as well as the shift in customer preferences. The bank also reported that the decision to close the branches was made following a review of its branch and service delivery network. According to the bank, branch traffic in some locations has been reduced by as much as 50 per cent over the last few years as customers continue to utilise digital banking platforms.
As at September 2020, branch transactions represented less than six per cent of total transactions while online and mobile transactions accounted for over 30 per cent; ABM and point of sale transactions account for the remaining 64 per cent, the bank said.